Professional Documents
Culture Documents
Agabon vs. NLRC
Agabon vs. NLRC
DECISION
YNARES-SANTIAGO, J.:
This petition for review seeks to reverse the decision[1] of the Court of Appeals dated
January 23, 2003, in CA-G.R. SP No. 63017, modifying the decision of National
Labor Relations Commission (NLRC) in NLRC-NCR Case No. 023442-00.
On appeal, the NLRC reversed the Labor Arbiter because it found that the petitioners
had abandoned their work, and were not entitled to backwages and separation pay.
The other money claims awarded by the Labor Arbiter were also denied for lack of
evidence.[5]
Upon denial of their motion for reconsideration, petitioners filed a petition for
certiorari with the Court of Appeals.
The Court of Appeals in turn ruled that the dismissal of the petitioners was not illegal
because they had abandoned their employment but ordered the payment of money
claims. The dispositive portion of the decision reads:
WHEREFORE, the decision of the National Labor Relations Commission is
REVERSED only insofar as it dismissed petitioners money claims. Private
respondents are ordered to pay petitioners holiday pay for four (4) regular holidays
in 1996, 1997, and 1998, as well as their service incentive leave pay for said years,
and to pay the balance of petitioner Virgilio Agabons 13 th month pay for 1998 in
the amount of P2,150.00.
SO ORDERED.[6]
Hence, this petition for review on the sole issue of whether petitioners were illegally
dismissed.[7]
Petitioners assert that they were dismissed because the private respondent
refused to give them assignments unless they agreed to work on a pakyaw basis
when they reported for duty on February 23, 1999. They did not agree on this
arrangement because it would mean losing benefits as Social Security System (SSS)
members. Petitioners also claim that private respondent did not comply with the twin
requirements of notice and hearing.[8]
Private respondent, on the other hand, maintained that petitioners were not dismissed
but had abandoned their work.[9] In fact, private respondent sent two letters to the
last known addresses of the petitioners advising them to report for work. Private
respondents manager even talked to petitioner Virgilio Agabon by telephone
sometime in June 1999 to tell him about the new assignment at Pacific Plaza Towers
involving 40,000 square meters of cornice installation work. However, petitioners
did not report for work because they had subcontracted to perform installation work
for another company. Petitioners also demanded for an increase in their wage to
P280.00 per day. When this was not granted, petitioners stopped reporting for work
and filed the illegal dismissal case.[10]
It is well-settled that findings of fact of quasi-judicial agencies like the NLRC are
accorded not only respect but even finality if the findings are supported by
substantial evidence. This is especially so when such findings were affirmed by the
Court of Appeals.[11] However, if the factual findings of the NLRC and the Labor
Arbiter are conflicting, as in this case, the reviewing court may delve into the records
and examine for itself the questioned findings.[12]
Accordingly, the Court of Appeals, after a careful review of the facts, ruled
that petitioners dismissal was for a just cause. They had abandoned their
employment and were already working for another employer.
To dismiss an employee, the law requires not only the existence of a just and valid
cause but also enjoins the employer to give the employee the opportunity to be heard
and to defend himself.[13] Article 282 of the Labor Code enumerates the just causes
for termination by the employer: (a) serious misconduct or willful disobedience by
the employee of the lawful orders of his employer or the latters representative in
connection with the employees work; (b) gross and habitual neglect by the employee
of his duties; (c) fraud or willful breach by the employee of the trust reposed in him
by his employer or his duly authorized representative; (d) commission of a crime or
offense by the employee against the person of his employer or any immediate
member of his family or his duly authorized representative; and (e) other causes
analogous to the foregoing.
Abandonment is the deliberate and unjustified refusal of an employee to resume his
employment.[14] It is a form of neglect of duty, hence, a just cause for termination of
employment by the employer.[15] For a valid finding of abandonment, these two
factors should be present: (1) the failure to report for work or absence without valid
or justifiable reason; and (2) a clear intention to sever employer-employee
relationship, with the second as the more determinative factor which is manifested
by overt acts from which it may be deduced that the employees has no more intention
to work. The intent to discontinue the employment must be shown by clear proof
that it was deliberate and unjustified.[16]
In February 1999, petitioners were frequently absent having subcontracted for an
installation work for another company. Subcontracting for another company clearly
showed the intention to sever the employer-employee relationship with private
respondent. This was not the first time they did this. In January 1996, they did not
report for work because they were working for another company. Private respondent
at that time warned petitioners that they would be dismissed if this happened again.
Petitioners disregarded the warning and exhibited a clear intention to sever their
employer-employee relationship. The record of an employee is a relevant
consideration in determining the penalty that should be meted out to him. [17]
The measure of this award depends on the facts of each case and the gravity of the
omission committed by the employer.[25]
The rule thus evolved: where the employer had a valid reason to dismiss an
employee but did not follow the due process requirement, the dismissal may be
upheld but the employer will be penalized to pay an indemnity to the employee. This
became known as the Wenphil or Belated Due Process Rule.
On January 27, 2000, in Serrano, the rule on the extent of the sanction was
changed. We held that the violation by the employer of the notice requirement in
termination for just or authorized causes was not a denial of due process that will
nullify the termination. However, the dismissal is ineffectual and the employer must
pay full backwages from the time of termination until it is judicially declared that
the dismissal was for a just or authorized cause.
The rationale for the re-examination of the Wenphil doctrine in Serrano was
the significant number of cases involving dismissals without requisite notices. We
concluded that the imposition of penalty by way of damages for violation of the
notice requirement was not serving as a deterrent. Hence, we now required payment
of full backwages from the time of dismissal until the time the Court finds the
dismissal was for a just or authorized cause.
Serrano was confronting the practice of employers to dismiss now and pay
later by imposing full backwages.
We believe, however, that the ruling in Serrano did not consider the full
meaning of Article 279 of the Labor Code which states:
ART. 279. Security of Tenure. In cases of regular employment, the employer shall
not terminate the services of an employee except for a just cause or when authorized
by this Title. An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to
the time of his actual reinstatement.
This means that the termination is illegal only if it is not for any of the justified
or authorized causes provided by law. Payment of backwages and other benefits,
including reinstatement, is justified only if the employee was unjustly dismissed.
The fact that the Serrano ruling can cause unfairness and injustice which
elicited strong dissent has prompted us to revisit the doctrine.
To be sure, the Due Process Clause in Article III, Section 1 of the Constitution
embodies a system of rights based on moral principles so deeply imbedded in the
traditions and feelings of our people as to be deemed fundamental to a civilized
society as conceived by our entire history. Due process is that which comports with
the deepest notions of what is fair and right and just.[26] It is a constitutional restraint
on the legislative as well as on the executive and judicial powers of the government
provided by the Bill of Rights.
Due process under the Labor Code, like Constitutional due process, has two
aspects: substantive, i.e., the valid and authorized causes of employment termination
under the Labor Code; and procedural, i.e., the manner of dismissal. Procedural due
process requirements for dismissal are found in the Implementing Rules of P.D. 442,
as amended, otherwise known as the Labor Code of the Philippines in Book VI, Rule
I, Sec. 2, as amended by Department Order Nos. 9 and 10. [27] Breaches of these due
processrequirements violate the Labor Code. Therefore statutory due
process should be differentiated from failure to comply with constitutional due
process.
Constitutional due process protects the individual from the government and
assures him of his rights in criminal, civil or administrative proceedings;
while statutory due process found in the Labor Code and Implementing Rules
protects employees from being unjustly terminated without just cause after notice
and hearing.
In Sebuguero v. National Labor Relations Commission,[28] the dismissal was
for a just and valid cause but the employee was not accorded due process. The
dismissal was upheld by the Court but the employer was sanctioned. The sanction
should be in the nature of indemnification or penalty, and depends on the facts of
each case and the gravity of the omission committed by the employer.
In Nath v. National Labor Relations Commission,[29] it was ruled that even if
the employee was not given due process, the failure did not operate to eradicate the
just causes for dismissal. The dismissal being for just cause, albeit without due
process, did not entitle the employee to reinstatement, backwages, damages and
attorneys fees.
Mr. Justice Jose C. Vitug, in his separate opinion in MGG Marine Services,
Inc. v. National Labor Relations Commission,[30] which opinion he reiterated
in Serrano, stated:
C. Where there is just cause for dismissal but due process has not been
properly observed by an employer, it would not be right to order either the
reinstatement of the dismissed employee or the payment of backwages to him. In
failing, however, to comply with the procedure prescribed by law in terminating
the services of the employee, the employer must be deemed to have opted or, in any
case, should be made liable, for the payment of separation pay. It might be pointed
out that the notice to be given and the hearing to be conducted generally constitute
the two-part due process requirement of law to be accorded to the employee by the
employer. Nevertheless, peculiar circumstances might obtain in certain situations
where to undertake the above steps would be no more than a useless formality and
where, accordingly, it would not be imprudent to apply the res ipsa loquitur rule
and award, in lieu of separation pay, nominal damages to the employee. x x x. [31]
Justice in every case should only be for the deserving party. It should not be
presumed that every case of illegal dismissal would automatically be decided in
favor of labor, as management has rights that should be fully respected and enforced
by this Court. As interdependent and indispensable partners in nation-building, labor
and management need each other to foster productivity and economic growth; hence,
the need to weigh and balance the rights and welfare of both the employee and
employer.
Where the dismissal is for a just cause, as in the instant case, the lack of
statutory due process should not nullify the dismissal, or render it illegal, or
ineffectual. However, the employer should indemnify the employee for the violation
of his statutory rights, as ruled in Reta v. National Labor Relations
Commission.[36] The indemnity to be imposed should be stiffer to discourage the
abhorrent practice of dismiss now, pay later, which we sought to deter in
the Serrano ruling. The sanction should be in the nature of indemnification or
penalty and should depend on the facts of each case, taking into special consideration
the gravity of the due process violation of the employer.
Under the Civil Code, nominal damages is adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered by him.[37]
As enunciated by this Court in Viernes v. National Labor Relations
Commissions,[38] an employer is liable to pay indemnity in the form of nominal
damages to an employee who has been dismissed if, in effecting such dismissal, the
employer fails to comply with the requirements of due process. The Court, after
considering the circumstances therein, fixed the indemnity at P2,590.50, which was
equivalent to the employees one month salary. This indemnity is intended not to
penalize the employer but to vindicate or recognize the employees right to statutory
due process which was violated by the employer.[39]
The violation of the petitioners right to statutory due process by the private
respondent warrants the payment of indemnity in the form of nominal damages. The
amount of such damages is addressed to the sound discretion of the court, taking into
account the relevant circumstances.[40] Considering the prevailing circumstances
in the case at bar, we deem it proper to fix it at P30,000.00. We believe this form
of damages would serve to deter employers from future violations of the statutory
due process rights of employees. At the very least, it provides a vindication or
recognition of this fundamental right granted to the latter under the Labor Code and
its Implementing Rules.
Private respondent claims that the Court of Appeals erred in holding that it failed to
pay petitioners holiday pay, service incentive leave pay and 13 th month pay.
We are not persuaded.
We affirm the ruling of the appellate court on petitioners money claims.
Private respondent is liable for petitioners holiday pay, service incentive leave pay
and 13th month pay without deductions.
As a general rule, one who pleads payment has the burden of proving it. Even where
the employee must allege non-payment, the general rule is that the burden rests on
the employer to prove payment, rather than on the employee to prove non-payment.
The reason for the rule is that the pertinent personnel files, payrolls, records,
remittances and other similar documents which will show that overtime,
differentials, service incentive leave and other claims of workers have been paid are
not in the possession of the worker but in the custody and absolute control of the
employer.[41]
In the case at bar, if private respondent indeed paid petitioners holiday pay and
service incentive leave pay, it could have easily presented documentary proofs of
such monetary benefits to disprove the claims of the petitioners. But it did not, except
with respect to the 13th month pay wherein it presented cash vouchers showing
payments of the benefit in the years disputed.[42] Allegations by private respondent
that it does not operate during holidays and that it allows its employees 10 days leave
with pay, other than being self-serving, do not constitute proof of payment.
Consequently, it failed to discharge the onus probandi thereby making it liable for
such claims to the petitioners.
Anent the deduction of SSS loan and the value of the shoes from petitioner Virgilio
Agabons 13th month pay, we find the same to be unauthorized. The evident intention
of Presidential Decree No. 851 is to grant an additional income in the form of the
13th month pay to employees not already receiving the same[43] so as to further
protect the level of real wages from the ravages of world-wide inflation.[44] Clearly,
as additional income, the 13th month pay is included in the definition of wage under
Article 97(f) of the Labor Code, to wit:
(f) Wage paid to any employee shall mean the remuneration or earnings, however
designated, capable of being expressed in terms of money whether fixed or
ascertained on a time, task, piece , or commission basis, or other method of
calculating the same, which is payable by an employer to an employee under a
written or unwritten contract of employment for work done or to be done, or for
services rendered or to be rendered and includes the fair and reasonable value, as
determined by the Secretary of Labor, of board, lodging, or other facilities
customarily furnished by the employer to the employee
from which an employer is prohibited under Article 113[45] of the same Code from
making any deductions without the employees knowledge and consent. In the instant
case, private respondent failed to show that the deduction of the SSS loan and the
value of the shoes from petitioner Virgilio Agabons 13 th month pay was authorized
by the latter. The lack of authority to deduct is further bolstered by the fact that
petitioner Virgilio Agabon included the same as one of his money claims against
private respondent.
The Court of Appeals properly reinstated the monetary claims awarded by the
Labor Arbiter ordering the private respondent to pay each of the petitioners holiday
pay for four regular holidays from 1996 to 1998, in the amount of P6,520.00, service
incentive leave pay for the same period in the amount of P3,255.00 and the balance
of Virgilio Agabons thirteenth month pay for 1998 in the amount of P2,150.00.
WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of
the Court of Appeals dated January 23, 2003, in CA-G.R. SP No. 63017, finding that
petitioners Jenny and Virgilio Agabon abandoned their work, and ordering private
respondent to pay each of the petitioners holiday pay for four regular holidays from
1996 to 1998, in the amount of P6,520.00, service incentive leave pay for the same
period in the amount of P3,255.00 and the balance of Virgilio Agabons thirteenth
month pay for 1998 in the amount of P2,150.00 is AFFIRMED with
the MODIFICATION that private respondent Riviera Home Improvements, Inc. is
further ORDERED to pay each of the petitioners the amount of P30,000.00 as
nominal damages for non-compliance with statutory due process.
No costs.
SO ORDERED.